Augmented reality takes mobile phones and real life content/signals/personal interaction to create useful information or interactive entertainment.
Example: You see a sign in a foreign language on the street and would like it translated to English. With AR, you point your mobile phone at the sign and it automatically translates it for you. Source
http://questvisual.com/
Example 2: Google Goggles. Take a picture and retrieve info on it ASAP. See
http://www.google.com/mobile/goggles/#landmark